Applying for Tax Returns in Switzerland

Applying for Tax Returns in Switzerland

Updated on Thursday 19th March 2020

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Applying-for-Tax-Returns-in-SwitzerlandThe Swiss taxation system

Switzerland’s taxation system is based on the appliance of federal, cantonal and local taxes. The cantons have reached certain agreements regarding the harmonization of certain taxation provisions, but differences still remain with respect to the wealth, estate, inheritances and gains from real estate property. Taxation is applied to all incomes and assets, but Switzerland has double taxation agreements with about 60 countries that will significantly reduce certain taxes and even provide exemptions.

Tax returns for foreign citizens in Switzerland

Foreign citizens living in Switzerland will not be levied withholding tax if they have a C residence permit, if they are married to Swiss citizens, if they are cross-border employees, if they own real estate or if they are registered as sole traders in Switzerland. In all of these situations, one is required to file for tax returns with the local Swiss authorities. L or B permit holders earning over 120,000 CHF per year will be levied the withholding tax, but they are also required to file their tax returns.

What must a tax return file contain?

Foreign citizens applying for tax returns in Switzerland must declare all their sources of income and personal assets. The income refers to all amounts of money made in Switzerland or abroad and it includes salaries, dividends, pensions, interests and incomes made from real estate rentals. The income tax rate in Switzerland is progressive and goes up to 41.5% at federal, cantonal and local levels together.

The wealth tax is applied at cantonal and local levels and on personal assets only. The wealth tax is applied to Swiss owned bank accounts, securities and real estate. The wealth tax is progressive and has a maximum rate of 0.8%. The tax return is based on information such as the marital status, the number of children and residence.

What is the relevant documentation when applying for tax returns in Switzerland?

Foreign citizens are advised to collect and keep certain documents that will help them when applying for tax returns in Switzerland. Among these salary flyers, bank and securities statements are very helpful. Retired individuals should collect private pension statements or statements of occupational pension fund contribution. For those owning a property in Switzerland statements of property tax payments, bills for maintenance or renovations will help when filing their tax returns.

For detailed information about the taxation system or the due dates for filing your tax returns you can contact our law firm in Switzerland.